Global Markets Strategy21 February 2024J P M O R G A Nwww.jpmorganmarkets.comEquity Macro ResearchRajiv Batra AC(65) 6882-8151rajiv.j.batra@jpmorgan.comBloomberg JPMA BATRA J.P. Morgan Securities Singapore Private LimitedKhoi Vu, CFA(65) 6882-8170khoi.t.vu@jpmorgan.comJ.P. Morgan Securities Singapore Private LimitedRushit Mehta(9122) 6157-3711rushit.mehta@jpmchase.comJ.P. Morgan India Private LimitedMixo Das(852) 2800-0511mixo.das@jpmorgan.comJ.P. Morgan Securities (Asia Pacific) Limited/ J.P. Morgan Broking (Hong Kong) LimitedHead of India ResearchSanjay Mookim(91-22) 6157-3600sanjay.mookim@jpmorgan.comJ.P. Morgan India Private Limited, J.P. Morgan Tower, Santacruz(E), Mumbai - 400098, SEBI Registration: INH000001873, (91-22) 6157-3000.Nifty 50�s ex-financials revenue/PAT came in at +5%/15% YoY, and EBITDA margin expansion was 78bps. Nifty 50�s Beat/Miss came at 24%/28% (using Bloomberg consensus estimates for the non-covered companies). MSCI India ex financials companies� revenue/PAT grew at 6%/31% YoY with EBITDA margins expanding by 171bps leading to an overall operating margin of 19%. MSCI India�s 3Q24 Beat/Miss came at 29%/33%. Softer commodity prices along with lower energy and freight costs benefited the volume drive for the companies. Within MSCI India universe, Real Estate, Consumer Discretionary and Materials had the most beats (>+5% of est.), whereas Financials and IT had the most misses (<-5% of est.). Overall, 3Q results were decent, with uptick in revenue growth and margin expansion. Going ahead, we expect that the input cost benefits will slowly taper; focus will shift towards business prospects and balance sheet strength. We are upgrading the hospital sector to OW and downgrading the Consumer Staples sector to neutral but continue to prefer premium consumption plays.•Over the last one month, MSCI India consensus earnings expectations for 2024/25 were marginally revised up by 0.4%/0.9% respectively. A higher number of companies in Energy, Auto, Healthcare, Industrials and Utilities had earnings revised upwards. For FY24, IOCL, BPCL, HPCL, Coal India, Zomato, Trent, Tata Motors, Lupin, Cummins and GAIL India witnessed double digit positive earnings revisions (Table 2EPS revision by stocks - MSCI India). Overall for 2024 consensus earnings estimates, Auto, Healthcare, Energy, Communication Services and Diversified financial services had >1% upward revisions, while Materials, Consumer Staples, Industrials and Insurance had negative revisions of 1% (Table 1EPS revisions by sector - MSCI India). MSCI India consensus earnings growth estimate for CY24/25 is 14%/15% respectively. •Key catalysts to watch in coming months: Fed meeting in March, General election in April-May, RBI meeting in April and a few state assembly elections. Our Nifty-50 Index target is 22,000. If BJP retains power in the 2024 elections and RBI starts easing amidst a potentially benign US/glob...
